Being a listed company sure is beneficial and puts on an immediate and direct effect on the different aspects of the company. But will these effects stay in the long run or is it just for temporary convenience? In this article, Ren Zhengfei, Huawei’s founder and spiritual leader, talks about how Huawei’s conviction and determination on staying as a private company led it to where it is today.

It is a trend that no one in China can deny: Chinese companies flocking to go public. In 2015, when stock prices were crashing, the Chinese government introduced an embargo on new initial public offerings (IPOS) for a period of four months. Ever since the lifting of this freezing period, IPOS are receiving faster approval to facilitate financial contributions to the Chinese economy. In fact, according to the Wall Street Journal, in 2017, Chinese companies made up about one-fourth of the companies listed across the world. Interestingly, many of these companies decided to go public in the US.

Reasons for this are that many Chinese companies do not meet the more stringent Shanghai and Hong Kong listing standards and consider the US to be a much more international market. At the same time, however, many also believe that China is set to continue having positive GDP growth, which is reflected by the increasing number of Chinese companies debuting on the Shanghai and Shenzhen stock exchanges.

Important to note in this respect is that when entering the competitive market in China it does help to have a big company behind you. For example, when Chinese Search engine Sogou (SOGO) went public, their debut became a “big thing”, mainly so because heavyweight Tencent owned about 39 percent of the company. One thing that is, however, very clear: the demand for Chinese IPOS is high and has caused somewhat of a herding behaviour – companies keep coming to go public.